During 2009, a number of key decisions issued from panels of the Patented Medicine Prices Review Board (PMPRB) and the courts on issues relating to Canada’s federal system of price control. Some of the notable activities relating to the Board’s activities in 2009 include:

  • A decision of the Federal Court was released on July 10, 2009, addressing challenges brought by the industry association, Rx&D and 18 member co-applicants, and Pfizer, to the PMPRB’s reporting requirements. At issue was a Communiqué released on August 18, 2008 whereby the PMPRB advised patentees that it would require mandatory reporting of all benefits and discounts, including third party payments made by patentees, and would require these benefits to be factored into the average transaction price of a product. The Federal Court set aside the Communiqué, and held that the Board had no jurisdiction to require third party payments to be reported. For a full report see:

http://www.gowlings.com/resources/enewsletters/DrugPricingReimbursement/HtmFiles/V4N01_20100122.en.html.

The matter was not appealed, yet, as reported in the January 22, 2010 Gowlings Drug Pricing & Reimbursement Group Newsletter, the Board has not issued further clarification of the current reporting requirements (see our report at: http://www.gowlings.com/resources/enewsletters/DrugPricingReimbursement/Htmfiles/V4N01_20100122.en.html).

  • A decision of the Federal Court was released on November 12, 2009 in respect of judicial review of a Board Panel’s finding of excessive pricing. In its decision the PMPRB had decided a product was excessively priced based only on consideration of the consumer price index (CPI). The court noted that the PMPRB’s Guidelines appeared to provide for conclusive presumptions of excessive pricing in two situations: when price increases exceeded the Board's CPI Adjustment methodology and when a medicine was priced higher in Canada than in any of the seven comparator countries. However, the court held that no such presumptions are provided for in the Patent Act. Each factor in the Act is to be given reasonable consideration and no factor can be ignored, nor can one factor be given dominance such that the others are essentially irrelevant. The court emphasized that the PMPRB had failed to demonstrate clearly what consideration, if any, was given to the other factors. In the result, the Court referred the case back to the Board for re-determination by a differently constituted Panel. For our full report, see:

http://www.gowlings.com/resources/enewsletters/DrugPricingReimbursement/Htmfiles/V3N09_20091118.en.html

  • A decision of the Federal Court was released on March 17, 2009 relating to judicial review of the Board’s decision to assert jurisdiction to require the reporting of data in respect of medicines sold under Canada’s special access regime where the locus of the sale was the U.S. and not Canada. While the Board had found it had jurisdiction to require reporting of prices, the Federal Court disagreed and held that the Board did not have jurisdiction to require disclosure of pricing data relating to these sales as they were not sales in Canada. The sales were for product shipped “Free on Board” New Jersey, making the locus of sale the U.S. from a commercial perspective (see our report at:

http://www.gowlings.com/resources/enewsletters/DrugPricingReimbursement/Htmfiles/V3N06_20090420.en.html).

However, the case was appealed, and the Federal Court of Appeal overturned the decision on December 23, 2009 (see decision at: http://decisions.fca-caf.gc.ca/en/2009/2009fca378/2009fca378.html).

  • In the context of a hearing into allegations of excessive pricing of a patented drug sold by generic manufacturer ratiopharm, the Board Staff sought an order adding a patentee/licensor as a party/respondent to the proceeding. The Board Panel disagreed and, rather than adding the licensor as a party, issued a subpoena requiring the licensor to provide certain pricing information sought by the Board Staff. In the same decision, the Board took note of revised filings by ratiopharm, seeking to include rebates paid as performance enhancements and continuing education. The Board ordered inspection of ratiopharm’s records by Welch LLP to seek relevant information relating to the pricing of the products at issue; see decision at: http://www.pmprb-cepmb.gc.ca/cmfiles/ratio-Salbutamol-PreliminaryMotions-Reasons-Aug1409.pdf
  • The Board accepted a number of Voluntary Compliance Undertakings (VCU’s) in 2009. These included VCU’s in cases for which a Notice of Hearing had been issued (CONCERTA, NEULASTA, and STRATTERA) and other cases where no Notice of Hearing had issued (ANDRIOL, BREVIBLOC, CLARITIN, ELIGARD, SUPRAX, TRINIPATCH, VEPESID, VOLUVEN and XARELTO). For a list of VCU’s, see: http://www.pmprb-cepmb.gc.ca/english/View.asp?x=126
  • Only one Notice of Hearing was issued in 2009 (NEULASTA) and that matter was resolved by a VCU in 2009 before the commencement of the Hearing. As at the end of 2009, there were a number of hearings yet to be concluded, including NICODERM, PENLAC, PENTACEL, QUADRACEL, ratio-SALBUTAMOL and APO-SALVENT (although a decision in the PENTACEL/QUADRACEL matters, dated December 21, 2009 was published on January 28, 2010). See decision at:

http://www.pmprb-cepmb.gc.ca/english/view.asp?x=271&id=171.